lea county affordable housing plan

199 Pages·2011·23.79 MB·English

by  Christopher Graeser

LEA COUNTY
AFFORDABLE
HOUSING
PLAN

Developed by
HOUSING STRATEGY PARTNERS
Alexandra Ladd, Principal Monica Abeita, Principal
1206 Apache Avenue, Santa Fe, NM 87505
Adopted October 2011

Lea County Commission
Gregg Fulfer, Chairman
Mike Whitehead, Vice Chairman
Ron Black
Dale Dunlap
Hector Ramirez

Mike Gallagher, County Manager
Russ Doss, Executive Director, Lea County Housing, Inc.
Lea
 County
 Affordable
 Housing
 Plan
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TABLE OF CONTENTS

Executive Summary 1
Introduction 6
Section I: Community Profile 11
Overview 11
Demographics 13
Economic Profile 17
Housing Profile 24
Section II: Housing Inventory 29
Special Needs/Shelter Beds 29
Public Housing 31
Subsidized Rental 33
Subsidized Homeownership 33
Section III: Land Use and Development 35
Governmental Constraints 35
Non-Governmental Constraints 39
Economic Constraints 44
Housing Development Feasibility Analysis 47
Summary of Housing Development Recommendations 55
Section IV: Housing Needs Analysis 57
Affordability 57
Homeownership Gap Analysis 61
Rental Gap Analysis 63
Rehabilitation of Existing Homes 69
Section V: Implementation Plan 69
Overview 69
Funding Recommendations 73
Capacity Building Recommendations 78
Program Development Recommendations 84
Real Estate Development Recommendations 90
Regulatory Recommendations 97
Section VI: Individual Community Plans 100
Overview 100
Affordable Housing Plan for the City of Lovington 103
Affordable Housing Plan for the City of Eunice 117
Affordable Housing Plan for the City of Jal 131
Affordable Housing Plan for the Town of Tatum 148
Collaboration with the City of Hobbs 162
Appendices 166
Appendix A. Lea County Major Employers 166
Appendix B: Lea County Income 169
Appendix C: Employer Assisted Housing 170
Appendix D: Ordinance Recommendations 181
Appendix E: Funding Resources for Affordable Housing 188

Lea
 County
 Affordable
 Housing
 Plan
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LIST OF FIGURES

Figure 1: Spectrum of Housing Need 6
Figure 2: Southeastern NM and Southwestern TX Regional Map 11
Figure 3: Lea County Population Trends 12
Figure 4: Unemployment Rate, 2001-2010 19
Figure 5: Lodgers Tax Receipts 22
Figure 6: Taxable Gross Receipts from Retail Trade (Lea County) 23
Figure 7: Vacancy Type 28
Figure 8: Income Distribution by AMI, Lea County 59
Figure 9: Opportunities and Constraints – Funding 73
Figure 10: Opportunities and Constraints – Capacity Building 78
Figure 11: Opportunities and Constraints – Program Development 84
Figure 12: Opportunities and Constraints – Real Estate Development 90
Figure 13: Opportunities and Constraints – Regulatory Environment 97
Figure 14: Community Housing Priorities 100
Figure 15: Five-Year Housing Goal 101
Figure 16: Income Distribution by AMI, City of Lovington 107
Figure 17: FIRM Floodplain Insurance Rate Map for Lea County, NM 115
Panel 955 of 2150 (North Lovington)
Figure 18: Potential Development Sites in Lovington 116
Figure 19: Eunice Increase in Median Household Income, 1999-2009 121
Figure 20: Income Distribution by AMI, City of Eunice 122
Figure 21: Potential Development Sites in Eunice 130
Figure 22: Income Distribution by AMI, City of Jal 136
Figure 23: Potential Development Sites in Jal 146
Figure 24: FIRM Floodplain Insurance Rate Map for Lea County, NM 147
Panel 2102 of 2150 (Jal)
Figure 25: Income Distribution by AMI, Tatum 152
Figure 26: Potential Development Sites in Tatum 160
Figure 27: FIRM Floodplain Insurance Rate Map for Lea County, NM 161
Panels 440 and 445 of 2150 (Tatum)
Figure E-1:Sample Development Process Flow Chart 193

Lea
 County
 Affordable
 Housing
 Plan
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LIST OF TABLES

Table 1: Population Change, 2000-2010 13
Table 2: Demographics 14
Table 3: Hispanic/Latino Population Change, 2000-2010 16
Table 4: Workers by Industry 18
Table 5: Sources of Household Income 20
Table 6: Educational Attainment 20
Table 7: Pull Factors from Major Cities in SE New Mexico, 2006 21
Table 8: Housing Characteristics 25
Table 9: Housing Unit Increase, 2000-2010 26
Table 10: Building and Installation Permits, 2000-2010 27
Table 11: Vacant Housing Units, 2000-2010 27
Table 12: Inventory of Emergency Shelter/Transitional Beds 30
Table 13: Inventory of Income-Restricted Rental Properties 32
Table 14: Subdivision Categories in Lea County 36
Table 15: Jal Zoning Categories 37
Table 16: City of Eunice Residential Zoning Districts 37
Table 17: City of Lovington Zoning Districts 38
Table 18: Affordability and Incomes 48
Table 19: Single Family Subdivision Feasibility Analysis 49
Table 20: Single Family Subdivision Feasibility Analysis –Modular 50
Table 21: Single Family Scattered Site Feasibility Analysis 51
Table 22: Single Family Scattered Site Feasibility Analysis – Modular 52
Table 23: Small Multifamily Development Feasibility Analysis 53
Table 24: Small Multifamily Development – Modular 54
Table 25: Affordability Factors 57
Table 26: Lea County Income Limits 58
Table 27: Lea County Area Median Income Categories 59
Table 28: Affordability Matrix 61
Table 29: Lea County Home Sales Listings 62
Table 30: Summary of BBER Rental Survey Results 63
Table 31: Rental Rates for Hobbs Apartment Properties 64
Table 32: Market-Rate Rental Affordability 65
Table 33: Rehabilitation Needs Analysis 67
Table 34: Summary of Projected Needs/Five-Year Goal 70
Table 35: Implementation Plan Matrix 71
Table 36: Lovington Population Growth, 2000-2010 104
Table 37: City of Lovington Households at a Glance 105
Table 38: Lovington Change in Housing Units/Vacant Units, 2000-2010 106
Table 39: City of Lovington Area Median Income Categories 107
Table 40: Housing Production Plan for Lovington 112
Table 41: Eunice Population Growth, 2000-2010 118
Table 42: City of Eunice Households at a Glance 119
Table 43: Eunice Change in Housing Units/Vacant Units, 2000-2010 120
Lea
 County
 Affordable
 Housing
 Plan
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Table 44: City of Eunice Area Median Income Categories 122
Table 45: Eunice Home Sale Listings 123
Table 46: Eunice Housing Production Plan 126
Table 47: City of Jal Households at a Glance 133
Table 48: Jal Population Growth, 2000-2010 133
Table 49: Jal Change in Housing Units/Vacant Units, 2000-2010 135
Table 50: City of Jal Area Median Income Categories 137
Table 51: Jal Home Sale Listings 138
Table 52: Jal Housing Production Plan 142
Table 53: Jal Development Factors 144
Table 54: Town of Tatum Households at a Glance 149
Table 55: Tatum Population Growth, 2000-2010 150
Table 56: Tatum Change in Housing Units/Vacant Units, 2000-2010 151
Table 57: Town of Tatum Area Median Income Categories 153
Table 58: Tatum Apartments and Rental Units 155
Table 59: Tatum Housing Production Plan 157
Table C-1: Affordable Home Price Ranges 183
Table C-2: Affordable Rent Ranges 184
Table C-3: Mandated Affordability Periods 185
Table E-1: Technical Assistance Sources 189
Table E-2: Development Financing Sources 190
Table E-3: Mortgage Financing Programs 191
Table E-4: Down Payment Assistance Sources 192

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 County
 Affordable
 Housing
 Plan
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EXECUTIVE SUMMARY

The purpose of the Lea County Affordable Housing Plan is to assess housing need in Lea
County, to determine the feasibility of real estate development, and to provide
recommendations for addressing the needs. As approved by the New Mexico Mortgage
Finance Authority, this plan is in full compliance with the New Mexico Affordable
Housing Act, enabling Lea County to adopt an ordinance that will mobilize public
resources to support the provision of affordable housing and related services, new
construction and the rehabilitation of existing homes. For purposes of this document,
affordable housing is defined as a dwelling unit whose monthly cost does not exceed
30% of a family’s gross monthly income. This applies to all households earning up to
120% of the Area Median Income (AMI).

Demographics
Historically, Lea County’s population was based in several ranching communities and
experienced rapid growth from oil and gas discoveries. Population surges and crashes
have occurred over the years, as oil and gas prices rose and fell, leading to fluctuations
in migration and population throughout the years. Based on historical figures, the
Census routinely projected low and even declining population growth for Lea County.
However, 2010 data show that not only has Lea County grown, but its growth has
surpassed all previous projections to make it the fourth fastest growing county in New
Mexico. Other summary data include:

• Lea County has a younger population than NM and the US.
• Lea County has more family and married households than NM or the US.
• Lea County’s Hispanic or Latino population grew by 50% over the last decade.

Economic Profile
Lea County is first and foremost an oil and gas county. This is strongly reflected in the
high percentage of workers found in the mining industry, which includes oil and gas
extraction. According to the US Census, the agriculture and mining industry sector
makes up 19.6% of all jobs in Lea County, compared to 4.1% in New Mexico and 1.8% in
the US. Other industries associated with oil and gas, such as Transportation, Wholesale
Trade, and Utilities, employ a greater percentage of workers than they do in New
Mexico. Construction also employs a higher percentage of workers, likely due new
construction projects in Lea County in the last few years. According to the New Mexico
Department of Workforce Solutions, Lea County ranked 4th of 36 counties for average
weekly wages of $891 in 2009. Other summary data include:
EXECUTIVE
 SUMMARY
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• Lea County has a lower percentage of jobs in professional occupations,
government, and low wage sectors.
• Lea County’s unemployment rate is typically lower than NM.
• Lea County is part of the “New Energy Corridor” including nuclear, renewable, and
clean coal production and technology.
• Lea County has low educational attainment levels, with 28% of adults lacking a
high school diploma.
• Hobbs is regional center for retail and services with steady revenue from lodgers’
and gross receipts taxes.
• Large employers may be Lea County’s greatest assets for future housing
development.

Housing Profile
Behind the boom cycle that has characterized the past eight years, Lea County has
struggled to house new workers and its own growing population. The County suffers
from aging housing stock, some of which has deteriorated during “bust” periods; poorly
maintained rental units; an inadequate number affordable homes and rentals; and a
stalled housing market in the communities outside of Hobbs that makes new
development difficult. Rapidly increasing housing prices in Hobbs also pose a very real
danger to low-income residents who will increasingly find themselves priced out of the
market. For all of these reasons, Lea County leaders, employers, and citizens point to
housing as one of Lea County’s greatest problems and as an obstacle to economic
development. Other summary data include:

• 70% of Lea County residents are homeowners and 30% rent their homes.
• The majority of Lea County homes were built before 1990, and the rate of new
construction is half of NM.
• 100% of building permits issued in Eunice, Jal and Tatum since 2000 are for
manufactured homes.
• Vacancy rates have dropped since 2000 from 12.2% to 10.8%.

Housing Inventory Housing
 Type
  #
 of
 beds/units

Emergency
 Shelter
  57

At the present time, Lea County’s
Transitional/Supported
 Housing
  95

supply of subsidized and/or
Public
 Housing
  70
 units/81
 vouchers

affordably priced housing is limited
Income-­‐Restricted
 Rental

  549

in scope and primarily located in (includes
 senior)

Hobbs and Lovington. Emergency Subsidized
 Homeownership

  109

(includes
 new
 units,
 homebuyers

shelter and transitional/supported
trained/created
 and
 rehabs)

rental (other than public housing) are
found only in Hobbs.
Lea
 County
 Affordable
 Housing
 Plan
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Land Use and Real Estate Development
There is no “one size fits all” development approach for providing affordable housing in
Lea County. Rather, as the following analysis and the recommendations in this plan
illustrate, real estate development will only happen as part of a “ripple effect” of
improving the County’s local development capacity, increasing the financial options for
people seeking housing, creating a “mortgage ready” pool of potential homebuyers,
improving the collaboration and effectiveness of the service delivery network for
emergency and supported housing, and rehabilitating older and deteriorating homes.
Summary findings include:

• Governmental regulation does not pose a significant constraint to new
development.
• The variability of employment erodes the marketability of single family homes.
• Financing constraints are related to both the mortgage capacity of individual
buyers and a lack of construction financing.
• Appraised land values are often not high enough to justify construction costs.
• Lack of infrastructure may be more of an obstacle than land availability for housing
development.
• Cloudy titles in small communities may pose barrier for redevelopment.
• Lea County’s recent economic boom results in a unique rental demand due to the
influx of temporary workers in the oil field and construction industries.

Housing Needs Analysis
There are several factors affecting affordability in any given housing market. This plan
looks at income/poverty; cost and rent burden; and distribution of incomes to
determine the capacity of Lea County residents to afford housing. A review of rental
rates and availability and sales values indicates the depth of the supply of housing and
projecting current and future needs for affordably priced housing establishes the overall
demand for housing. Summary findings include:

• Income and poverty rates are similar to the rest of NM with variations across the
county.
• Fewer Lea County households are cost and rent burdened than NM and US.
• The area median income (AMI) in Lea County for a family of four is $47,100 and
63% of Lea County residents are classified as low- or moderate-income.
• The actual demand for homeownership is believed to be much lower than the
number of households who can actually afford a home based on income data.
• On the basis of price alone, homeownership opportunities do exist in the
marketplace for low and moderate-income Lea County households.
EXECUTIVE
 SUMMARY
  3
• Lea County’s private rental market, as represented by multi-family complexes is
generally unaffordable to residents with low incomes.
• Lea County lacks an adequate supply of subsidized, supported housing for people
with very low incomes.

Projected Housing Needs
Lea County is a place where low costs of living and changing employment conditions
both enable and force people to relocate. Because temporary construction and
fluctuating oil field employment are part of the fabric of the community, housing must
be flexible enough to meet changing needs. For this reason, this and other planning
documents have recommended that new housing construction focus on multi-family
rental housing, as this housing type can be adapted to meet the community’s changing
needs, including those of the workforce, low income residents, seniors and special
needs populations.

In order to identify projected housing needs, several supply/demand factors are taken
into consideration. This plan identifies two types of need: “Catch Up” which considers
the current unmet needs and supply deficiencies in the community; and “Keep Up” need
which considers job/population growth and projects future demand. This plan projects
housing needs as a five-year goal for each of the small municipalities in Lea County.
Specific development recommendations and the factors used to estimate need are
discussed in detail in Section VI: Individual Community Plans.

The box at right shows the number of estimated
Figure 15: Five-Year
units projected as housing need for the next five
Housing Goal
years. All but five units to be constructed by the Lovington 170 units
Tatum Municipal Schools trades program are Eunice 69 units
Jal 63 units
rental units. In Lovington, Eunice and Jal, we also
Tatum 53 units
recommend that ten to 12 single-family units be Lea County 355 units
added to the housing inventory, either through
infill or partnerships with developers.
Rehabilitation of homes is projected at 17 units in Lovington, six units in Eunice, four
units in Jal, and seven units in Tatum, based on the proportional number of housing
units in each community. A countywide five-year rehabilitation target of 100 homes
including Hobbs is established in Section IV, based on the capacity of LCHI’s HOME-
funded owner-occupied rehab program, MFA’s Energy$mart program, and
recommended programs for acquisition/rehabilitation and low-cost weatherization.
Each of these rehabilitation initiatives is discussed in detail in Section V, pages 93-96.

Lea
 County
 Affordable
 Housing
 Plan
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